Audit 320273

2023–1 Prior Year Audit Entries Not Posted Condition: Management failed to post prior year audit entries. Criteria: Agreed upon audit adjustments must be posted to the financial statements each year. Cause: The cause is undeterminable. Effect: The financial statement records did not contain all financial transactions of the property. Recommendation: I recommend management post audit entries to agree financial records to audit report.

2023-2 Reserve for Replacement Deposits Not Made or Not Made Timely Condition: The Project did not make the required deposits into the bank account for September 2023 and October 2023. There were only 10 deposits made for the entire year of 2023. Criteria: According to the Regulatory Agreement, “mortgagor will establish and maintain a reserve fund for replacements in a separate account in a bank…Concurrently with the effective commencement of rental assistance payments under the Project Rental Assistance Contract, the Mortgagor will deposit an amount…per month unless a different date or amount is approved in writing by HUD”. Cause: The cause was undeterminable. Effect: The cash balance was overstated by $4,000 related to deposits that were never made to this account. The balance was corrected during the audit. Recommendation: I recommend the Property make required monthly deposits according to the Regulatory Agreement each month

2023-3 Late HUD Financial Reporting Condition: The owner did not meet the HUD financial reporting requirement. Criteria: According to HUD’s Uniform Financial Reporting Standards rule, annually, an owner is required to submit a financial statement, prepared in accordance with generally accepted accounting principles (GAAP), in the electronic format specified by HUD. The unaudited financial statement is due three months after the owner’s fiscal year end and the audited financial statement is due nine months after its fiscal year-end (24 CFR section 5.801). The financial statement must include the financial activities of this program. Cause: The cause is undeterminable. Effect: The Project is not compliant with HUD program requirements. Recommendation: I recommend the owner meet HUD program requirements.

2023-4 Unpaid Loan from Reserve for Replacement Condition: The Project failed to comply with the terms of HUD approved 9250. Criteria: According to HUD-9250 approved on April 11, 2022, a $21,073 loan from the reserve for replacement account was to be repaid upon approval of the budget and the contract. Both the budget and contract were approved for the year however, repayment was not made. Cause: The cause is undeterminable. Effect: The Project did not comply with the repayment terms of HUD 9250. Recommendation: I recommend the Project comply with HUD 9250 Funds Authorizations.

2023–1 Prior Year Audit Entries Not Posted Condition: Management failed to post prior year audit entries. Criteria: Agreed upon audit adjustments must be posted to the financial statements each year. Cause: The cause is undeterminable. Effect: The financial statement records did not contain all financial transactions of the property. Recommendation: I recommend management post audit entries to agree financial records to audit report.

2023-2 Reserve for Replacement Deposits Not Made or Not Made Timely Condition: The Project did not make the required deposits into the bank account for September 2023 and October 2023. There were only 10 deposits made for the entire year of 2023. Criteria: According to the Regulatory Agreement, “mortgagor will establish and maintain a reserve fund for replacements in a separate account in a bank…Concurrently with the effective commencement of rental assistance payments under the Project Rental Assistance Contract, the Mortgagor will deposit an amount…per month unless a different date or amount is approved in writing by HUD”. Cause: The cause was undeterminable. Effect: The cash balance was overstated by $4,000 related to deposits that were never made to this account. The balance was corrected during the audit. Recommendation: I recommend the Property make required monthly deposits according to the Regulatory Agreement each month

2023-3 Late HUD Financial Reporting Condition: The owner did not meet the HUD financial reporting requirement. Criteria: According to HUD’s Uniform Financial Reporting Standards rule, annually, an owner is required to submit a financial statement, prepared in accordance with generally accepted accounting principles (GAAP), in the electronic format specified by HUD. The unaudited financial statement is due three months after the owner’s fiscal year end and the audited financial statement is due nine months after its fiscal year-end (24 CFR section 5.801). The financial statement must include the financial activities of this program. Cause: The cause is undeterminable. Effect: The Project is not compliant with HUD program requirements. Recommendation: I recommend the owner meet HUD program requirements.

2023-4 Unpaid Loan from Reserve for Replacement Condition: The Project failed to comply with the terms of HUD approved 9250. Criteria: According to HUD-9250 approved on April 11, 2022, a $21,073 loan from the reserve for replacement account was to be repaid upon approval of the budget and the contract. Both the budget and contract were approved for the year however, repayment was not made. Cause: The cause is undeterminable. Effect: The Project did not comply with the repayment terms of HUD 9250. Recommendation: I recommend the Project comply with HUD 9250 Funds Authorizations.